Jon LeSage – Oct 12, 2019, 4:00 PM CDT
If Great Britain keeps its commitment to switch over its vehicles to electric by 2050, the government will see a whopping loss of 28 billion pounds ($35 billion) paid by motorists driving traditional gasoline- and diesel-powered vehicles.
That comes from a study released Friday by London-based Institute for Fiscal Studies examining the impact of the UK’s net-zero greenhouse gas emissions law adopted in June and signed by previous Prime Minister Theresa May. England became the first G7 country to set the goal of reaching zero net emissions by 2050.
Fuel duties on petrol-powered vehicles make up almost 4 percent of total government receipts — and all of that will disappear unless urgent action is taken, according to think tank IFS’ study. The government may need to take a new approach to taxing motorists as all-electric and plug-in hybrid vehicles become the norm, the study advises.
The UK’s mission to switch over to EVs and renewable energy by 2050 represents “a huge long-run fiscal challenge” for the government, according to the study.
The government faces other hits on tax revenue. The UK will be seeing a drop of about 20 billion pounds a year ($24.5 billion) from the government’s new policy of freezing tax duties to help people struggling with the cost of living, the IFS said. There’s also concern that another 1 billion pounds ($1.229 billion) could be lost if Prime Minister Boris Johnson follows through on his commitment to cut duties by 2 pence per liter of fuel.
“The government should set out its long-term plan for taxing driving, before it finds itself with virtually no revenues from driving and no way to correct for the costs -– most importantly congestion –- that driving imposes on others,” said Rebekah Stroud, an IFS economist who co-authored the report.
Duty on unleaded gasoline and diesel has remained frozen at 57.95 pence per liter since 2011, accounting for 1.3 percent of England’s GDP. The fuel recently has been costing 126.9 pence per liter, of which 57.95 pence is duty — about 45 percent of the total fuel cost.
The think tank recommends implementing taxes on EVs soon, as car owners are becoming used to avoiding these duties on their fuel. New motoring taxes should reflect distance driven and vary according to when and where the trips take place in the vehicle. A flat-rate tax per mile driven could be another taxation model used, according to the study.
Prime Minister Johnson used his platform at the Conservative Party conference last week to advocate for continuing support in the net-zero emissions mandate by mid-century. Johnson has a strategy to be put into place advocating investments made in EV production, energy reduction in all new homes, and the planting of one million trees to combat climate change.
The Tory party has a much larger policy question to address first — what to do about Brexit. The UK is due to leave the European Union at the end of this month.
The new prime minister isn’t interested in hearing arguments made by protesters warning of imminent disaster from climate change. Thousands of climate change protestors blocked London’s roads and bridges on Oct. 8 to launch a two-week long demonstration. That led to the Metro police arresting 280 activists.
There’s more than meets the eye to the recent decision by Dyson to cancel his electric car (drivable Hoover) project:
https://www.bbc.com/news/business-50004184
He must have seen that the economics of electric cars are destroyed by the catastrophically rapid loss of performance and thus value of the most expensive part of the e-car – the fuel cell battery. After a 4-5 year lease term the car will be close to worthless. The lease companies won’t touch them.
Dyson makes a very good vacuum cleaner.
I’ve had a battery-operated, handheld Dyson vacuum cleaner for at least six years and the original battery is still going strong. It is the perfect instrument for picking up dog hair (as long as you don’t use the powerhead, which gets plugged with dog hair pretty quickly, I just take the powerhead off and use it like that).
I would definitely recommend a Dyson handheld vacuum cleaner.
Speaking of vacuum cleaners, I have a puzzling situation here at my house. I have an Australian Shepard dog (seven years old) and summer is over around here and it is starting to get cold and my Australian Shepard is just shedding hair like crazy. Now I would think that if it is getting colder, the shedding should stop but that’s not what’s happening.
I wonder if my Australian Shepard is confused about which hemisphere she is living in. She may think she is in Australia and summertime is coming on. 🙂
I wonder if that total includes the nearly 1.8 billion GBP lost when the CPS tax ceases to produce revenue …
Don’t they pay tax on electricity? If so, then the fuel equivalent is already being paid by the EV owners.
“Johnson has a strategy to be put into place advocating investments made in EV production, energy reduction in all new homes, and the planting of one million trees to combat climate change.”
Too bad this is counterproductive to the stated goals. Then, again, what else is new in CC?AGW Alarmism?
ELECTRIC VEHICLES EMIT MORE CO2 THAN DIESEL ONES, GERMAN STUDY SHOWS
* Date: 23/04/19
http://bit.ly/2ZYdUXJ
Unintended consequences abound. If you are in the UK, please correct any errors. I have not been there in an unfortunately long time.
The push to EVs will simply make vehicles unaffordable to the masses (perhaps by intent, explaining why there’s no drive to increase power production or install charging points).
So, far less income taxes collected from oil companies, very little from petrol sales at the pump, less from purchases of vehicles (sales tax? VAT?), and little from any yearly tax on registration or tags or whatever they may have.
Further, local goverment counsels will lose millions coming in from traffic offenses and parking fines (it seems that any free parking there is very time-limited, after which fines accrue, even in private business parking lots). These fines seem to be the main sources of income for many local governments.
If they try to go forward with the drive to remove vehicles from the road, they will need to implement a plethora of new taxes to recoup the revenue losses.
There have been quite a few comments about cycle lanes in the postings here.
Readers will find the link below entertaining:
https://mpora.com/road-cycling/worst-cycle-lanes-ever-grace-the-earth-1
Yes folks, this is where the taxes go!
Let no-one think that British cycle lanes are magic carpets, designed to help users effortlessly and safely to their destinations, and which cost a fortune to build at the expense of the hapless motorist.
Good to raise awareness of the taxes levied on gasoline… when comparing the costs. Actually I would like to see if this is a zero sums game. What are the taxes per mile equivalent between gasoline and electricity generation to charge the cars. It would be the amount of energy generation required to produce a charge on the car’s battery for a mile of travel.
I wonder why nobody ever thinks of this. I know that the renewable and EV enthusiasts claim that fossil energy is subsidized but in reality, they are massive revenue items for the government of any industrial nation. Take away taxes on fossil fuels and vehicles and the amount of money available for all kinds of perks drops. Pay subsidies to EV’s and other Greenie pet projects and see a massive expense item that comes on top of falling revenues. There is only two ways. Higher taxes or massive social spending cuts. What’s it going to be?
Hi Rudolph: It’s even worse, regarding what they mean when they say “subsidy” The subsidies in fossil fuel refer to expenses used to write off on their tax burden. But subsidies in so called “green” schemes refers to money given to them that is taken from someone else. It is a false equivalency.
When I point this out, the response is usually an ad hominem attack… or their eyes cross and their ears turn red…
UK Gov and local authorities have been salivating about “Congestion Charging” for years now. EV’s will simply make this road charging (pay per mile) inevitable. Job done, heaps more tax for the workers to pay.
Here in NZ, we have had road user charges for many years for diesel-powered vehicles. Diesel is tax-free at the pump, but the owner must purchase a distance allowance, the cost being determined by vehicle size / loaded weight. Heavy trailers are separately charged. Hub-odometers are compulsory except on light vehicles which may use their in-built odometers. This was considered easier than squabbling over tax refunds for farm machinery, fishing boats, etc. The revenuers have already prodded the Government about bringing EVs into the fold.
Sunny October 15, 2019 at 2:43 am
Michel, [ ]
Why can’t cyclists pay tax, why is it the car driver who has to pay tax for the roads to be fixed?
Because only SWITZERLAND demands number plates on velos ( velocities ) aka bicycles:
“Should cyclists have number plates?
Cyclists should have to pay road tax and insurance like everyone else. Give them a number plate, so they can tracked when they cause accidents. The same should apply to mobility vehicles – they need number plates and should be taxed and insured.
Bikes should be registered and cyclists taxed and insured – GovYou”
https://www.google.com/search?q=Swiss+velos+number+plates&oq=Swiss+velos+number+plates&aqs=chrome.
velos in the dutch mountains.
https://youtu.be/tPyiZI_WrXw
My fault –
velos ( velocities) –> velos ( velocipeds )
https://www.google.com/search?q=velocipede+meaning&oq=velocipeds+&aqs=chrome.